How food makers can build trust in the food chain

UK consumers place less trust in the food chain today than they did five years ago: How can the food sector reverse this trend?

According to a report from retail insurer NFU Mutual, only 12% of UK consumers have confidence in the European food chain. Trust in the global food chain is lower still at just 7%.

This reflects growing scepticism about the reliability of the food industry. One-third of people are less trusting of products and retailers than they were five years ago, compared with only 9% whose trust has increased. And people expect the situation to worsen further still, with 33% of respondents suggesting that food crime is likely to rise in the future.

“Our research exposes the damaging effect that various influencers have had on consumer confidence over time,”​ Frank Woods, retail sector specialist at NFU Mutual, commented.

The major driver for increased suspicion was found to be “high profile”​ cases of food fraud, such as the 2013 horsemeat scare, which saw horse meat make its way into food products that were marketed as beef throughout Europe. According to NFU Mutual, 46% of people said media coverage of incidents like this had dented their confidence in the food sector.

Increased coverage is, in part, being fuelled by a rising number of food recalls. According to data from the Food Standards Agency, 2015 saw a 78% jump in food and beverage recalls. Most recently, Europe’s food sector has been caught up in the ongoing scare related to the use of fipronil – an insecticide banned for use in animals destined to enter the food chain - to treat laying hens. Contaminated products have entered the food chain across Europe, both as eggs and processed foods.

Duncan Moir, the product manager for supply chain software provider Epicor Software, belives that the food sector has, in some respects, been an architect of its own demise when it comes to consumer trust.

“Consumer confidence has been harmed by food producers who deliberately try to mislead the public with ‘accurate but confusing’ labelling. Many of the terms on labels only mean something to food professionals and so it is almost impossible for a consumer to understand all the ingredients listed. It makes it very difficult for a consumer to make an informed choice of what to buy, and, even if they could, shopping would take much longer by the time they’d read every label in detail! For a consumer, the safest way to shop is to buy from known and trusted sources and stick to well-known brands. These food producers have a lot more to lose by being implicated in food fraud and so invest more in fraud prevention and detection,”​ he commented.

Brexit squeeze

Woods warned that retailers and food makers are being squeezed by economic trends that have been exasperated by the UK’s exit from the European Union and stessed that this pressure must not result in lower food standards.

A weakening economic outlook and consumer spending mean that there is significant pressure for the industry to keep prices low. At the same time, depreciation of the sterling is forcing production costs for British manufacturers up.

Brexit has also raised the concern that regulations governing imported food quality could become laxer as the UK government pursues free trade agreements with countries outside the EU.

“There has never been a more important time for tackling food fraud and getting regulation right as we plan to leave the European Union, but government proposals for where we will get our food from are already under tough scrutiny from industry and consumers alike with concerns over quality.​

“Retailers could be impacted as producers are under immense pressure to offset price rises caused by the weakened value of sterling and higher import costs, squeezing already tight budgets and resources and potentially cornering them into using cheaper global suppliers that may be more vulnerable to fraud.”​

Building trust

Developing a reputation for quality has been important to the much UK food sector, Food and Drink Federation director general Ian Wright noted.

“We have a well-earned global reputation for provenance, quality and innovation. Yet we face enormous challenges over the next few years - Brexit, continued intense competition in the retail sector and the consumer’s demand for ever higher quality food at very competitive prices,​” he said.

Certification schemes have proven an important way that food makers can foster trust in their products. According to NFU’s research, 67% of people say food assurance stamps help inform their purchasing decisions, with Fair Trade certification proving the most influential among UK consumers.

While certification marks might have the greatest impact on consumer trust levels, there are other important ways manufacturers can tackle food fraud within their own supply chains, according to Pricewaterhouse Coopers.

“A food company’s primary fraud prevention measures are its food safety management and quality control systems, as well as food quality and safety managers and staff. External controls include food safety agencies, anti-fraud regulations, and law enforcement agencies,”​ PwC noted in a recent research report.

Traceability – and the ability to communicate this to consumers - is also key to securing the supply chain, Epicor’s Moir stressed.

“To regain consumer confidence, responsible food manufacturers must be vocal on the steps they are taking to prevent food fraud and show that they are prioritising end-to-end visibility across the supply chain. Food production firms need to have the capability to record data from every point in the supply chain – from the smallest raw ingredient, through to packaging,”​ he argued.

“Those food manufacturers who prioritise traceability will be the ones who successfully eradicate food fraud and rebuild consumer confidence.”​

Meanwhile, locally-sourced products are also viewed as more trustworthy, NFU Mutual noted.

“Businesses using local suppliers are among the most trusted, presenting promising opportunities for smaller producers to reach out to their local communities with success. A short, local supply chain produces higher confidence levels in a quarter of people and people also had the most trust in the British supply chain. Producers, retailers and caterers alike may wish to consider using and celebrating a short, British or local produce supply chain to win the hearts and confidence of their customers.”​

This has resulted in a bump in demand for local sourcing. Figures from research firm Euromonitor International revealed that locally sourced and packaged foods and beverages are expected to reach a sales value of around €88bn globally by 2020.

A reliable and trustworthy supply chain is a prerequisite for success – and companies that fail to deliver pay a heavy price in terms of costly recalls. Successfully communicating the trustworthiness of food products presents food makers with the opportunity to deliver value, build loyalty and tap into growth opportunities.